TIFIA Credit Program Overview T ransportation I nfrastructure F inance and I nnovation A ct (TIFIA) Updated June 2015
Background on TIFIA Strategic goal – to leverage limited Federal resources and stimulate private capital investment in transportation infrastructure by providing credit assistance in the form of direct loans, loan guarantees, and standby lines of credit (rather than grants) to projects of national or regional significance. On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (MAP–21) was signed into law, providing for substantial changes in the TIFIA credit program. Key objectives • Facilitate projects with significant public benefits • Encourage new revenue streams and private participation • Fill capital market gaps for secondary/subordinate capital • Be a flexible, “patient” investor willing to take on investor concerns about investment horizon, liquidity, predictability and risk • Limit Federal exposure by relying on market discipline 1
Background on TIFIA (continued) Major requirements Large surface transportation projects ($50M generally, $15M for intelligent transportation systems (ITS), $25M for rural infrastructure projects) TIFIA loan amount has historically been less than 33 percent of eligible costs and DOT requests that applicants provide a rationale for TIFIA loan requests of up to 49 percent of costs (permitted by statute) Senior debt must be rated investment grade by two rating agencies, unless project cost is less than $75M Dedicated revenues for repayment Applicable Federal requirements, including but not limited to Civil Rights, NEPA, Uniform Relocation, Titles 23 and 49 Public or private highway, transit, rail and port projects are eligible to apply for TIFIA assistance Application process – applicants must submit detailed letters of interest so DOT can evaluate creditworthiness and other eligibility requirements and, after invitation from the TIFIA Joint Program Office (JPO), a formal application 2
Eligible TIFIA Applicants and Projects Highways and Bridges Intelligent Transportation Systems State Governments Intermodal Connectors Private Firms Transit Vehicles and Facilities Special Authorities Intercity Buses and Facilities Local Governments Freight Transfer Facilities Passenger Rail Vehicles and Facilities Transportation Improvement Districts Rural Infrastructure Projects 3
Eligibility Requirements 1. Creditworthiness: a. Ability to satisfy applicable creditworthiness standards b. Rate covenant, if applicable c. Adequate coverage requirements to ensure repayment d. Ability to obtain investment grade ratings on senior debt 2. Foster partnerships that attract public and private investment for the project 3. Ability to proceed at an earlier date or reduced lifecycle costs (including debt service costs) 4. Reduces Contribution of Federal Grant Assistance for the Project 5. Construction contracting process can commence no more than 90 days from execution of a TIFIA credit instrument 4
Program Implementation: Selection & Funding of a TIFIA Project 2 1 If Requested by DOT, Project 3 4 Project Sponsor Sponsor Provides Additional Upon Invitation, Upon Invitation from DOT, Submits Letter of Information, Preliminary Project Sponsor Makes Project Sponsor Submits Interest on a Rolling Rating Opinion Letter and Oral Presentation to Complete Application Basis $100,000 DOT 5 7 DOT Notifies Project 6 DOT Credit Council Provides Sponsor Regarding DOT Staff Prepare Evaluation Recommendation to the Completeness of and Make Recommendation Secretary, who Makes Application No More Than to DOT Credit Council Final Determination 30 Days After Receiving Application 8 DOT Notifies Project 9 10 Sponsor Regarding Project DOT Issues Term Sheet, DOT Disburses Funds Upon Approval No More Than 60 Executes Credit Agreement, and Satisfaction of Conditions set Days After Delivery of forth in Credit Agreement Obligates Funds Notice Regarding Application Completeness 5
TIFIA Documentation Requirements Draft EIS circulated (or Categorical Exclusion of FONSI obtained) Preliminary rating Project consistent with Investment-grade opinion letter obtained state transportation plan rating on senior $100,000 provided debt submitted and, if applicable, Oral presentation included in metropolitan prior to anticipated transportation plan ROD obtained closing date Project included MAJOR in STIP REQUIREMENTS APPLICATIONS, Credit APPROVALS, agreement Application AND FUNDING executed submitted Letter of Funds disbursed interest according to provided terms Project sponsor invited to submit Project selection made application Term sheet issued Funding obligated 6
TIFIA Program Fees Project sponsors must reimburse DOT for the costs of the outside advisors who advise TIFIA on the transaction. • This transaction fee generally ranges between $400,000 and $700,000. • Fee may vary significantly depending on the complexity of the project. Borrowers must pay an annual Loan Servicing Fee, due by November 15, of approximately $13,000. DOT may also charge a Monitoring Fee as defined in the credit agreement (to date this fee has not been charged). 7
TIFIA Approved Projects (TIFIA Instruments in Millions) 8
TIFIA Portfolio ($Millions) TIFIA Project Project Instrument Credit Primary Revenue Project Number Type Cost Type Amount Pledge Active Credit Agreements 19991002B Miami Intermodal Center Intermodal 2,043 Direct Loan 270.000 User Charges 20031002 a South Bay Expressw ay (formerly SR 125 South) Highw ay 658 Direct Loan 140.000 User Charges 20061001 Interlink (formerly Warw ick Intermodal Station) Intermodal 280 Direct Loan 40.060 User Charges 20071004A I-495 Capital Beltw ay HOT Lanes Highw ay 1,938 Direct Loan 588.923 User Charges 20071002A SH 130 (Segments 5-6) Highw ay 1,328 Direct Loan 430.000 User Charges 20061002A Intercounty Connector Highw ay 2,566 Direct Loan 516.000 User Charges 20081002A I-595 Corridor Roadw ay Improvements Highw ay 1,834 Direct Loan 603.441 Availability Payments 20081004A Triangle Expressw ay Highw ay 1,172 Direct Loan 386.662 User Charges 20081008A Port of Miami Tunnel Highw ay 1,073 Direct Loan 341.038 Availability Payments 20081001A North Tarrant Express (Segments 1 and 2A) Highw ay 2,047 Direct Loan 650.000 User Charges 20081007A Transbay Transit Center Transit 1,189 Direct Loan 171.000 Real Estate Tax Increment 20071006A IH 635 Managed Lanes Highw ay 2,615 Direct Loan 850.000 User Charges 20101001A Denver Union Station Project Intermodal 519 Direct Loan 145.600 Sales Tax/Real Estate Tax Increment 20091001A President George Bush Turnpike Western Extension (SH 161) Highw ay 1,268 Direct Loan 418.405 User Charges 20111001A b U.S. 36 Managed Lane/Bus Rapid Transit Project: Phase 1 Highw ay 306 Direct Loan 54.000 User Charges 20111003A Eagle Project Transit 2,047 Direct Loan 280.000 Tax Revenues 20111004A Midtow n Tunnel Project Highw ay 2,089 Direct Loan 422.000 User Charges 20111002A c Presidio Parkw ay Project Highw ay 852 Direct Loan 150.000 Availability Payments 20111005A Crenshaw /LAX Transit Corridor Transit 1,749 Direct Loan 545.900 Sales Tax Revenues 20121001A SR 520 Floating Bridge and Eastside Plus West Approach Project Highw ay 2,736 Direct Loan 300.000 User Charges 20121002A I-95 HOV/Hot Lanes Project Highw ay 923 Direct Loan 300.000 User Charges 20121003A Dallas Area Rapid Transit Project Orange Line Extension (I-3) Transit 397 Direct Loan 120.000 Sales Tax Revenues 20131004A Riverw alk Expansion/Wacker Drive Reconstruction Project Highw ay 419 Direct Loan 98.660 Motor Fuel Tax and Project Revenues 20121006A SR 91 Corridor Improvement Project Highw ay 1,279 Direct Loan 421.054 User Charges 20131006A Chicago O’Hare International Airport Consolidated Joint Use Facility Intermodal 876 Direct Loan 288.100 User Charges and Facility Rents 20131002A North Tarrant Express (Segments 3A and 3B) Highw ay 1,638 Direct Loan 531.000 User Charges 20121004A Goethals Bridge Replacement Project Highw ay 1,436 Direct Loan 473.674 Availability Payments 20131007A LA 1 Improvements Highw ay 372 Direct Loan 122.000 State Appropriations 20131010A Ohio River Bridges Dow ntow n Crossing Highw ay Direct Loan 452.200 User Charges 1,452 As of 05/20/2015 Footnotes a SBX is in three notes: Tranche A in the amount of $59,100,809.63, Tranche B in the amount of $32,341,804.28, and Tranche D in the amount of $2,740,895.56 9 b The TIFIA Project includes both Phases 1 and 2 c Presidio project costs ($852 million) include Phases 1 and 2 and credit amount is based on tw o tranches of TIFIA debt
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